China’s State Council Begins Taking Steps Toward a Tiered Pricing System for Irrigation Water

China has begun reorganizing and adding to its irrigation and water conservation facilities to facilitate a tiered pricing mechanism encouraging more economical water use by farmers. “Some facilities have no anti-leak designs and in many cases irrigation water is not measured. All these need to be fixed before we bring in the tiered pricing mechanism,” said Wang Aiguo, a senior official of the Ministry of Water Resources at a press conference Friday [29 April 2016]…Full Article: Xinhua Apr 2016

Key Point

In April 2016, China’s State Council approved a regulation regarding the construction/operation of irrigation systems.

ChinaAg Comments

In January 2016, China’s State Council published guidelines on instituting a tiered pricing system for water usage. These guidelines included stipulations that cash crop farmers and livestock companies would be charged a higher price based on their respective goods garnering higher values in the market place. Additionally, prices for groundwater would be higher than surface water if the former is in low supply.

In 2015, China needed 1 cubic meter of water to produce 1 kg of grain, which is below the average of 1.2 kg to 1.4 kg for developed nations.

In May 2015, China’s Ministry of Agriculture stated it hopes to limit the country’s water usage for irrigation to 372 billion cubic meters annually, while at the same time increase its coverage irrigation.

At the beginning of 2014, China had 63.5 million hectares of land under irrigation and hopes to have 66.7 million ha by 2020.

In January 2014, China’s National Development and Reform Commission (NDRC) and its Housing and Urban-Rural Development Ministry announced plans to institute a tiered pricing structure for household water usage by the end of 2015. The first tier will kicks in once a household reaches 80% of average consumption while the second tier will be set to 95%.

In 2013, China had 63.4 million hectares of farm land under irrigation and utilized a total of 59.1 million MTs of fertilizers, of which nitrogenous and compound (i.e. NPK) were the most commonly used. Henan province was the largest consumer of chemical fertilizers and Heilongjiang province had the most land under irrigation.

In 2011, China had a total of 88,605 water reservoirs. Hubei province, home to the Three Gorges Dam, has approximately 14% of China’s total reservoir capacity. Guangdong and Hunan provinces each have 6% of China’s total reservoir capacity.